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MARKET TREND ANALYSIS

Weekly Energy Market Updates by Region- Archive

 

 

 


Issue week: May 14th, 2020  (Wk 20)

 

POWER MARKETS

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WEST Significant runoff has elevated hydro generation in the Pacific North-west to its highest levels for the year so far, which, together with light de-mand, have suppressed index prices in May. For the month, Day Ahead prices in SP15 and Mid-C are averaging $17.34/MWh and $11.17/MWh, respectively. In the term market, prices are down for all terms as SoCal Gas has noted no shortage of natural gas supply to power plants.

ERCOT  With some triple-digit exceptions on May 8, real-time prices over the past week have been in the low $20s/MWh for the most part. Basis for May has contracted of late in the West Load Zone but has grown in the South Load Zone, having settled at $14.00/MWh there. The ORDC adder has been minimal, and heat rates have slightly muted the increase in term gas prices to raise term prices modestly out the curve. Weather should be normal next week, so real-time prices should not see a great deal of volatility.

EAST Despite record low temperatures in the Northeast last weekend, prices held steady and remain at record lows of their own. RT printed approxi-mately $1.50/MWh higher than DA over the weekend across the main trad-ing hubs with the exception of Mass Hub, where it came in below DA by $1.38/MWh.

NATURAL GAS 

The EIA reported Thursday morning that, for the week end-ing May 8, U.S. inventories in-creased by 103 Bcf, snugly in the middle of the anticipated range of 93-115 Bcf. Total stockpiles now stand at 2,422 Bcf, up by 49.2% from a year ago and 20.6% above the five-year average for the same week.

The NYMEX prompt-month June contract preliminarily ended the day at $1.681/MMBtu, $0.065/MMBtu higher than yesterday’s close. Six weeks into injection season, the bigger picture con-tinues to be the relatively slow pace of injections, which amount to 83% of last year’s admittedly near-record pace. Nonetheless, at 138% of the five-year average, they have been more robust than normal. Although storage levels are on track to finish on the strong side, summer heat is imminent and fears of a substantial re-duction in production amid weak oil prices remain. Fortu-nately, whatever happens over the summer, storage levels look healthy for next winter when compared with the five-year average.

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